Israelsen 7Twelve
Investment Model Portfolios

Craig L. Israelsen, Ph.D., is an Associate Professor at Brigham Young University in Provo, Utah where he teaches Personal and Family Finance to over 1,200 students each year. The Israelsen Seven Equally Weighted is aimed to protect the portfolio against losses.

 

The portfolio has seven different asset classes and twelve different funds. Each fund has the same weight 8.3% so each asset class has a different weighting. The table below provides the weightings for each asset class, the funds that will be used to review performance and the ETF equivalent.The highly diversified portfolio with low aggregate correlation avoids losses effectively, reducing the standard deviation of return.

Plan investment options

Total Available Funds: 13
Asset Class Ticker Description Rating Expense
REAL ESTATE
Global Real Estate RWX SPDR DJ Wilshire Intl Real Estate 0.59%
REAL ESTATE VNQ Vanguard REIT ETF 0.12%
Emerging Market
DIVERSIFIED EMERGING MKTS VWO Vanguard Emerging Markets Stock ETF 0.08%
INTERNATIONAL EQUITY
Foreign Large Blend EFA iShares MSCI EAFE Index 0.33%
Others
ROOT CASH Cash NA
COMMODITIES
COMMODITIES BROAD BASKET DBC PowerShares DB Commodity Idx Trking Fund 0.85%
COMMODITIES GLD SPDR Gold Shares 0.4%
FIXED INCOME
Intermediate-Term Bond AGG iShares Barclays Aggregate Bond 0.03%
Inflation-Protected Bond TIP iShares Barclays TIPS Bond 0.19%
WORLD BOND BWX SPDR Lehman Intl Treasury Bond 0.35%
US EQUITY
LARGE BLEND VTI Vanguard Total Stock Market ETF 0.03%
SMALL BLEND VB Vanguard Small Cap ETF 0.03%
MID-CAP BLEND VO Vanguard Mid Cap ETF 0.04%
Average Expense Ratio: 0.25%

The following is a moderate-risk model portfolio constructed from the investment options of Israelsen 7Twelve.

This portfolio is proactively monitored and rebalanced on a monthly basis when needed, ensuring it remains in line with its target allocation. We offer customization features, allowing subscribers to tailor the portfolio to align with their own risk tolerance and return expectations by changing risk profile parameter.

Our model portfolio is rooted in the MyPlanIQ Asset Allocation Composite (AAC) strategy. This dynamic (tactical) asset allocation and quantitative fund selection algorithm prioritize risk management by dynamically adjusting stock allocations based on prevailing asset momentum. Extensive research has shown that this momentum-based tactical approach can potentially reduce temporary losses while maintaining or outperforming traditional buy-and-hold strategies.

Both historical back test and real-time portfolio return and risk data are shown in the table on this page. These metrics are compared with stock and moderate allocation index funds.

Furthermore, subscribers have the option to explore alternative strategies such as Strategic Asset Allocation Optimal (SAA) and Tactical Asset Allocation (TAA) to further customize their model portfolio. See our investment methodology for more details on the investment strategies


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Puzzled on what to invest?

  • We ask a few questions to decide your personal return and risk expectations
  • We build a custom portfolio for your plan (401(k), 403(b), 529 ...) or for a  brokerage account
  • We monitor and send timely rebalance emails on what investment funds to buy and sell
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